Coldwater Creek Earnings Dip
Coldwater Creek recorded $141.7 million in sales for its fiscal third quarter, which ended Dec. 1, and $1.6 million in income for earnings of 15 cents per share. Though overall sales were up from the $136.6 million recorded for the same period last year, income and earnings were down from fiscal third-quarter 2000, when the company made $7.1 million, or 64 cents per share.
Overall sales from Coldwater Creek's direct-to-consumer business, including catalog and Internet sales, were $124.6 million, down 0.8 percent from the same period in the last fiscal year. However, Internet sales gained in the period, rising 26.5 percent to $45.3 million.
In addition to poor economic conditions, unseasonably mild temperatures in much of the United States has led to poor sales for cold-weather clothing this fall.
The company's fiscal third-quarter announcement was in line with its warning in early December that its third-quarter earnings would be down and that a fourth-quarter loss is possible. That announcement, made Dec. 7, caused the company's stock price to plummet nearly $9, about 30 percent, to around $18. Coldwater Creek stock has recovered somewhat and was trading around $20 by the end of the day yesterday.
"As we announced in our Dec. 7 release, sales during the third quarter were significantly impacted by both the difficult economic environment and lower-than-expected customer response to the apparel in our core Northcountry fall catalog, which put pressure on our margins and affected our ability to leverage operating expenses," said Georgia Shonk-Simmons, president/CEO of Coldwater Creek, Sandpoint, ID. "Going forward, we intend to expand the scope of our 'wear now' merchandising strategy to offer a better balance of color and a broader assortment of fabrics that are appropriate nine months out of the year."